North Korean Smugglers Cash In as More Chinese Light Up

North Korean soldiers smoke cigarettes on the bank of the Yalu River across from the Chinese city of Dandong, Feb. 11, 2013.

AFP

North Koreans are smuggling cheap cigarettes across the border into China as they cash in on the growing demand for tobacco products in the world’s most populous nation and the lenient punishment meted out to offenders, according to sources in both countries.

“The smuggling of cigarettes has become more pervasive because of the increased Chinese demand nowadays,” a resident of North Korea’s Yanggang province told RFA’s Korean Service in a recent interview.

The source, who spoke on condition of anonymity, said the smuggling practice began two years ago but has intensified recently.

China is home to more than 300 million smokers—the most of any country, according to a December report in the Global Times newspaper, a tabloid with strong ties to the ruling Chinese Communist Party. Chinese smokers consume one-third of the world’s cigarettes.

In North Korea, the punishment for smuggling cigarettes is substantially lighter than for smuggling drugs or scrap metal, the Yanggang resident said, referring to North Korean factory workers who steal metal goods for sale across the border.

Sources said there is virtually no market for North Korean cigarettes that are legally imported into China, aside from sale to tourists as souvenirs.

But the market for cheap, smuggled North Korean cigarettes is booming because Chinese retailers "rebrand" them and are able to pass them off as Chinese cigarettes to consumers.

A resident of Changbai in China’s Jilin province—across the border from Yanggang province—said that mostly tourists seek out legally imported “Chosun,” or North Korean, cigarettes.

“Chosun cigarettes are exorbitantly expensive for tourists” who are willing to pay top dollar for souvenirs from the pariah nation, he said.

Instead, the smuggled North Korean cigarettes are bought by illegal Chinese manufacturers in Jilin’s Changbai and Baishan cities, where they “put a Chinese logo on them.”

A smuggler from Yanggang province told RFA that he frequently sold anywhere from 20 to 50 boxes of cigarettes for each trip across the border. Each box contains 500 packs of cigarettes, he said.

“I can make 50 yuan (U.S. $8) in profit for each box,” he said.

Cost per pack

Sources said that the average retail price of a pack of cigarettes in North Korea is around 3,500 North Korean won (around U.S. $0.50 on the black market).

Three popular brands in the country include Gohyang at 2,500 North Korean won (U.S. $0.36) per pack, Craven at 2,900 won (U.S. $0.41) per pack, and Yeomyeong at 3,500 won per pack.

The Yanggang smuggler said that the tobacco for the cigarettes is produced at factories such as the Korea Sonbong General Corporation and the Paeksan Cigarette Company, which are located in the border city of Hyeryong in North Hamgyong province and neighboring areas.

“The Chinese companies buy cigarettes made with the raw materials [these companies] sell,” he said, adding that the business of smuggling cigarettes is sure to grow quickly because of how cheaply they are made in North Korea.

Sources said that some North Korean factories send cigarettes via smugglers across the border in unmarked packaging where they are rebranded in China, while others falsely brand the packaging with materials that have been provided by the Chinese companies themselves.

Reported by Sung Hui Moon for RFA’s Korean Service. Translated by Goeun Yu. Written in English by Joshua Lipes.